How Many Credit Cards Should I Have?
Abid Salahi
Author5 min read
You've seen some new credit card offers that seem too enticing to ignore.
But you already own one or two credit cards.
You may be wondering...
How many credit cards are too many? How many credit cards should I have?
Are there any benefits to owning and using multiple credit cards?
I personally use 3-4 different credit cards per month.
Why?
It's fairly simple. To save more when you spend more.
But there are a few things to make a habit of if you plan on owning multiple credit cards...
Let's dive in:
5 Credit Card Best Practices
1. Do Not Max Out Any of Your Credit Cards
This is so that your credit utilization ratio remains below the recommended 30% threshold.
Essentially, if you have a credit card with a limit of $3000 and spend around $2700 on average per month, you're using up 90% of your available credit.
Why should that concern you?
It will impact your credit score... negatively.
Instead you could spread your $2700 monthly spending across multiple credit cards and avoid maxing out a single credit card.
That will help you maintain an excellent credit score while using credit cards effectively!
2. Never Spend More Than You Can Pay for
If you find yourself struggling to pay down the full credit card amount each month, owning multiple credit cards can further impact your credit score.
Your payment history has a whopping 35% weight in determining your credit score.
That means every monthly payment you miss will contribute to bringing down a larger portion of your credit score.
So always make sure to pay off your credit card fully at the end of each month.
3. Avoid Cash Advances When Possible
Cash advances come with high fees and high interest rates, and they begin accruing interest immediately.
They are useful in cases of absolute emergencies but should generally be avoided.
Accruing a lot of cash advances can harm your credit score over time.
4. Do Not Close Old Credit Card Accounts
A long credit history can help improve your credit score, so it's best to keep old credit card accounts open.
The length of your credit history, or the amount of time you have had credit accounts open, is one of the factors that makes up your credit score.
When you close an old credit card account, you shorten your credit history, which can hurt your credit score.
Do you want to show lenders that you are a responsible borrower?
Having a longer credit history and track record of responsible credit card usage will definitely help with that.
5. Do Not Open Too Many New Credit Cards at Once
Every time you apply for a new credit card, it generates a "hard inquiry" on your credit report, which can lower your credit score by a few points.
Having a lot of new credit accounts open at the same time can be seen as a red flag by lenders and indicate that you may be taking on too much debt or have difficulty managing your finances.
It's safe to say that too many credit cards can also make it harder for you to keep track of your spending and make payments on time.
The bottom line
So how many credit cards should you have?
And what's the real benefit of owning and managing multiple credit cards?
Use each card to maximize rewards from your purchases.
Let me explain in more detail...
Do you travel a lot every year? Get a travel credit card that suits your needs.
Do you frequently shop from Amazon? Consider the Amazon Rewards Mastercard. I use it solely for my Amazon purchases and earn 5% cashback!
Amazon.ca Rewards Mastercard®
3.1
Finly Rating
Welcome Bonus
Up to $150
I currently have or may soon have an Amazon Prime account
Annual Fee
$0
Interest Rates
19.99% / 22.99%
Why we like it
Why we like it
If you are a Prime member and want to maximize your cashback on your Amazon purchases, then this card is the best option for that specific purchase category. However, for other purchases, many other cards offer better benefits and rewards.
Pros & Cons
Pros & Cons
Pros
- If you are a Prime member, the 2.5% cashback offered on Amazon purchases is unbeatable in terms of rewards compared to other credit cards.
- The 2.5% cashback on all foreign currency transactions helps to offset the extra 2.5% fee.
Cons
- It offers very little on non-Amazon and non-Whole Foods purchases, with many other well-rounded credit cards out there that offer much more.
- Very limited benefits.
Product Details
Product Details
Rewards
- 2.5% cashback on Amazon.ca, Whole Foods and foreign currency transactions IF a prime member
- Only 1.5% on Amazon.ca and Whole foods and 1% on foreign currency transactions IF not a prime member
- 1% cashback on everything else
Insurance
Coverage
Purchase Protection
90 days
Extended Warranty
Up to a year
Benefits
Details
Car Rental Discount
10% off base rate of Avis Rent A Car and Budget Rent A Car
Trip and legal Assistance
Yes
Eligibility
Credit Score
GoodAnnual Income
N/A
Do you spend a lot of money on gas every month? The CIBC Dividend Visa Infinite Card will likely give you one of the best returns on your gas purchases at 4% reward value.
CIBC Dividend® Visa Infinite* Card
3.5
Finly Rating
Welcome Bonus
Up to $200
Annual Fee
$120
Interest Rates
20.99% / 22.99%
Why we like it
Why we like it
The CIBC Dividend® Visa Infinite Card* is an excellent choice for those who spend heavily on gas, EV charging, and groceries, offering one of the best cash back rates in those categories. The 10% cash back welcome offer sweetens the deal for new cardholders, though the high income requirements and annual fee may not make it the best fit for everyone. If you can meet the spending and income criteria, it provides solid value, especially with no limits on the total amount of cash back you can earn.
Pros & Cons
Pros & Cons
Pros
- High Cash Back Rates: Get 4% cash back on gas, EV charging, and groceries, plus 2% on restaurants, transportation, and recurring bill payments.
- No Limit on Total Cash Back: No maximum limit on the amount of cash back you can earn annually.
- Fuel Savings: Save up to 10 cents per litre at Journie Rewards gas stations like Ultramar, Pioneer, Fas Gas, and Chevron.
Cons
- High Income Requirement: Personal income of $60,000 or household income of $100,000 is required to qualify.
- Annual Fee: The card comes with a $120 annual fee, which might reduce the overall value for some users.
- Lower Insurance Coverage: Compared to similar cards, the insurance offerings are less comprehensive.
Product Details
Product Details
Rewards
- 4% cashback on Gas and Groceries if they are in the first $80K transactions of the year and $20K of categorical spends
- 2% cashback on Transportation, Dining and Recurring payments if they are in the first $80K transactions of the year and $20K of categorical spends
- 1% cashback on all other credit card purchases.
Insurance
Coverage
Emergency Out of province Medical
$5 Million per person, per trip. 10 day coverage.svg)
Car Rental Damage & Theft
$65K
Travel Accident
$500K
Mobile Device Insurance
$1000 per person, per occurrencePurchase Protection
90 daysExtended Warranty
Up to a year
Benefits
Details
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Gas Discount
save up to 10¢/L on fuel at participating Pioneer, Fas Gas, Ultramar and Chevron gas stationsCar Rental Discount
Get up to 25% off auto rentals at participating Avis and Budget locations worldwide.
Eligibility
Credit Score
Very GoodAnnual Income
$60,000 personal or $100,000 household
Or do you frequently dine out and want a free credit card with fantastic returns?
I use the Simplii Financial Visa Cashback Card which gives you 10% bonus cashback during your first 4 months of usage. But it doesn't stop there... you get 4% cashback on all restaurants and bars purchases after the 4 months end.
Simplii Financial™ Cash Back Visa* Card
4.4
Finly Rating
Welcome Bonus*
10% cash back† up to $1,000 in spending
Annual Fee*
$0
Interest Rates*
20.99% / 22.99%
Why we like it
Why we like it
If you dine out a lot and don't want to pay an annual fee for your credit card, the Simplii Financial™ Cash Back Visa* Card will undoubtedly be one of your best friends with its 4% cashback. Additionally, the card offers a decent cashback rate (1.5%) for gas, pharmacy, and groceries, making it one of the best no-annual-fee cashback credit cards in Canada. However, there are limits on how much you can earn in these categories. Therefore, you need to be careful not to exceed those limits; otherwise, your cashback rate will drop to 0.5% after those spending limits are reached.
Pros & Cons
Pros & Cons
Pros
- Highest cashback rate on restaurant purchases in Canada!
- Decent cashback rate on high spent categories such as groceries and gas.
- No annual fee for a card with great rewards.
Cons
- No insurance and benefits other than the standard purchase protection and extended warranty.
- Cap on the rewards that can be earned on each category.
Product Details
Product Details
Rewards*
- 4% cash back on eligible restaurant, bar, and coffee shop purchases up to $5,000 spent per year†
- 1.5% cash back on gas, groceries, drugstore, and pre-authorized payments up to $15,000 spent per year†
- 0.5% cashback on all other purchases†
Insurance*
Coverage*
Purchase Protection
Up to 90 daysExtended Warranty
Up to 1 year
Eligibility*
Credit Score
Very GoodAnnual Income
$15,000 personal or $15,000 household
So make every purchase count.
Use a credit card that gives you one of the best returns for your specific purchases.
One important thing to note is... keep track of your monthly credit card bills.
Whether you have an automated bill payment setup for your credit card bills or you manually pay them, set one specific day in each month to pay off all balances of your credit cards.
Alternatively, make sure you get an email notification for each credit card statement at the end of its monthly cycle, then pay them right away.
At the end of the day, as long as you manage multiple credit cards responsibly, you'll reap the rewards of higher savings each year.
I would say the right number of credit cards is different for everyone, but you'll likely not need more than 4-5 at max.
With 4-5 credit cards, you can cover almost all spending categories on a daily basis and maximize the rewards you earn.
Keep track of your balances, due dates, credit card limits and you'll be very successful with multiple credit cards.
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